Top Ten Business Deals of 2013: William Morris and IMG

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In early December, super-agent Ari Emanuel’s William Morris Endeavor talent agency and private equity backer Silver Lake won a bidding war for the sports and media talent agency IMG Worldwide in a $2.3 billion deal.
Emanuel, whose notoriously ruthless negotiating and management style was parodied in Jeremy Piven’s Ari Gold character in the TV show Entourage, spearheaded the takeover of industry stalwart William Morris by his upstart Endeavor talent agent in 2009. The firm represents top talent in Hollywood and the music world.

As the entertainment industry struggles in the face of declining DVD revenues and TV ratings, Hollywood agencies have ventured into the world of sports representation, widely considered a growth market, according to the New York Times.

William Morris competed for IMG against at least three other bidders, including a consortium of talent agency ICM Partners Inc. Emanuel and his team reportedly were willing to pay a premium because they believe synergies between their agency and IMG will create cost savings.

William Morris now faces key challenges: integrating the different cultures of entertainment and sports; hanging on to key clients; and maintaining revenue while cutting costs. Whether it can meet these goals and overcome the phenomenon of the “winner’s curse”—the common tendency for the winning bidder in an auction to overpay—remains to be seen.

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